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NCAA Options: More of the Same?

2011 August 15
by Brian Goff

A friend and semi-retired finance colleague who read Bobby McCormick and Bob Tollison’s insightful post on Subversion of the Academy by the NCAA, wondered where all this goes.  He readily admits the negative influences of the mixed amateur-professional system discussed by M-T, but comments, “I don’t see any obvious end to this situation.”

I agree.  As M-T note, the only genuine solutions are to go with options that most university presidents will find unpalatable:  Ivy (full amateur) or go full professional.  Yet, any other   “solutions” only superficially address the underlying amateur-pro mismatch and inevitable effort of dollars (or non-cash inducements) that try to get from the pro side to the amateur side:

1.  Leak a few more dollars from the professional side to the amateur side:  this is the current talk in the NCAA meetings.  A little more money for laundry, meals, … The impotence of such moves to address the huge dollar imbalances of revenue gained versus player value at mega-producers is too obvious to discuss.

2.  Re-organization:  when current Ohio State president Gordon Gee oversaw Vanderbilt, he initiated a much self-touted move to eliminate the athletics department.  Of course, he kept Vandy in the revenue-rich, professional-equivalent SEC conference rather than opting to “go Ivy” and start playing football at the Division III level.  Somehow, having someone with a title other than “athletics director” would solve the problems.  OK, we can check that off without much discussion also.

3. Increase/Decrease the number of rules:  restrictions on payments creates non-cash inducements and advantage-seeking from large things (like loans) to small things (hosting recruits in the coach’s home).  The NCAA has spent the last 25-years adopting ever-more detailed restrictions on these inducements/advantages — it’s merely an exercise in fingers-in-the-dike.  As soon as you plug one, creative people find another, and the rules are hard to enforce.  This brings about the counter-argument, “get rid of all the minute rules and focus on the big stuff like illicit payments.”  That move only resets the clock to the 1970s and restarts the fully array of non-cash inducements-advantages that led to the adoption of all the minutia.

4. Raise the cost of violations:  this option does reduce violating activity to some extent, especially when the costs are severe.  The death-penalty at SMU scared that school away from illicit activities for two decades, but it came with a huge price so high — emasculation of the program — that the NCAA didn’t go down that road again.   Through NCAA lobbying and encouragement, most states criminalized some kinds of benefits to players, particularly those flowing through agents.  Nonetheless, underground activity still persists by agents and non-agent boosters.  In the spring, the NCAA lobbied the NFL to penalize players based on violations of NCAA rules.  Not much was said by the NFL on this matter — presumably they are not real keen on becoming an enforcement tool of the NCAA.   Seemingly, technology and the 24/7 coverage of sports has increased the ability of the media and NCAA to ferret out violations.  Somebody stands ready to tweet-out coach and player violations with amazing speed.   These “raise the stakes” solutions do not wipe away the underlying basis of the problem — the amateur-professional mix.   Even with highly criminalized activities like drugs, where there is money or advantage to be gained, it’s impossible to eliminate all or even most underground activity, not to mention the negative of getting everybody from state government, the NFL, to some guy on the street involved in the NCAA enforcement scheme.

So, we are back with the M-T solution:  going Ivy or going full-bore pro without the restrictions on paying players.  But, how can schools/conferences “go pro” without blowing up the system altogether?  After all, courts, while explicitly recognizing the commercial-professional aspects of college football and basketball, have been reluctant to impose typical rules of commerce on higher ed institutions.  Judges (whether liberal or conservative ideologically) tend to be very conservative on such issues — they recognize the huge and politically powerful fan base and are reluctant to overturn such a valued part of society.

My suggestion — very, very unlikely but practical in its details — is to set up athletic teams as separate organizations (for profit or not-for-profit like the PGA) that pay royalties to academic institutions for use of the brand name and rent on facilities.  These teams would pay players just as any major or minor league team.  Such a system also removes the Title IX restrictions of the revenue-producing pro teams that are spun off from the truly amateur sports that continue as part of the university and under the rules of Title IX.

In a different historical world, football and basketball would have developed like baseball with parallel tracks for 18-year old players — for those seeking payment, an explicitly professional minor-league world and for those interested in academics or the college experience, a (mostly) amateur world of college baseball.  College baseball is not wholly removed from the amateur-pro problems of football and basketball, but the problems in baseball are much reduced.  The trouble is that there is no way, after football and basketball developed without extensive minor league systems, to jump over to such a world.  College teams have too much brand name capital built up for start-up minor league teams to compete so that, for instance, NBA D-League teams play only in college-poor areas.

One Response
  1. bobby permalink
    August 15, 2011

    Brian,

    points well taken. fixing this beast will be a burden of immeasurable proportions. it will take a huge scandal to shake up the mess. until then people will tinker at the margins trying to fix what can’t be repaired.

    as you say, the legacy of football and basketball developed over a century, and it won’t change until something truly horrible happens, after the barn has burned.

    once the inevitable true crisis emerges, something like your solution might flow.

    i envision that Congress will ultimately get involved and some sort of regulation with legal teeth might emerge.

    until that tsunami hits the shore, we will suffer the disease. my greatest fear is that we are cultivating a generation of college students, especially those who attend schools with major sports programs who will turn a deaf ear to low level cheating and lying; those who see the outcome as more important than the process. morality is the casualty of the ncaa cartel.

    but as you say, fixing this is no cake walk.

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